Moody’s: Genesis Energy view to negative

Moody's Investors Service said it changed the outlook for Genesis Energy LP’s ratings to negative from stable and affirmed the existing ratings, including its Ba3 corporate family rating.

The action follows the company's announcement that it reached an agreement to acquire the soda ash business of Tronox Ltd. for $1.325 billion. The company anticipates funding the transaction with the proceeds from issuance of $750 million of preferred equity, $550 million of new notes and drawings under its revolving credit facility.

The transaction is expected to close in the third quarter.

"The acquisition of the Tronox's soda ash business will further diversify Genesis' portfolio of businesses and provide a source of steady cash flow," Moody's vice president James Wilkins said in a news release.

"However, the move into the soda ash business poses certain integration and operating risks, and despite the ample preferred equity funding, the company's leverage remains high for the Ba3 CFR."

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